When a recession is looming, cost cutting can become a top priority. HR leaders must think critically about cost management to ensure long-term organizational success.
In response to the predictions of many economists who claim an economic recession is coming that will impact organizations across numerous industries, McLean & Company, the trusted HR research and advisory partner for HR and leadership professionals around the world, has released its blueprint titled Optimize HR Department Costs to Prepare for a Recession. The timely research is intended to help HR teams and leaders effectively prepare for a recession.
“Cost optimization needs to set an organization up for success in the long-term, which means layoffs and workforce reductions are often not the best options,” says Rachel Stewart, practice lead, HR research & advisory services at McLean & Company. “In a recession, HR will likely find itself operating in reactive mode. While HR can return to proactive and strategic cost optimization opportunities later, when conditions improve, decisive action on reactive measures must be taken now.”
When a recession hits, HR plays a dual role. Working with senior leaders on organization-wide cost-cutting initiatives is typically the dominant focus, but HR needs to prepare for cost optimization initiatives within its own department as well. This ensures organizational budgetary goals are achieved while also positioning the HR department for a quick recovery post-recession, supporting both short-term and long-term organizational goals.
To create a recession-responsive cost optimization plan, McLean & Company suggests that HR teams and leadership follow three steps while focusing on three key areas: HR initiative prioritization, vendor management, and HR workforce optimization. The three steps are:
- Plan and define goals – The first step includes conducting a SWOT (strengths, weaknesses, opportunities, and threats) analysis, identifying the organization’s business context and HR response mode, listing cost optimization constraints and parameters, and setting cost optimization goals.
- Determine cost optimization initiatives – Step two calls for discovering HR initiative cost optimization opportunities, unearthing workforce optimization initiatives, and identifying vendor management cost optimization initiatives.
- Prepare an action plan – The final step requires establishing a prioritized and aligned cost optimization roadmap, developing a communications plan, and creating an executive presentation about the roadmap that focuses on the essentials.
To prepare for cost optimization efforts amidst recession planning, HR professionals can download McLean & Company’s industry blueprint, Optimize HR Department Costs to Prepare for a Recession.
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For more about McLean & Company or to download the latest industry research, visit hr.mcleanco.com.
About McLean & Company
Through data-driven insights and proven best-practice methodologies, McLean & Company offers comprehensive resources and full-service assessments, action plans, and training to position organizations to meet today’s needs and prepare for the future.
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SOURCE Mclean & Company